Personal Loan Contract Template

We often need to take a loan to fulfill our business or personal needs. In this regard, we contact any friend, money lender or a bank. On the opposite side sometimes our friends or relatives need money and borrow it from us. In both the situations, we should make a contract, this kind of contract is known as Personal Loan Contract.

How to write Personal Loan Contract

The Personal Loan Contract is a legal document that is often called a promissory note, which contains a promise from one entity to pay a definite amount to the second party either on demand or on a fixed date that is written in the agreement.

Following points will be helpful for writing a concise and clear legal contract.

  • This agreement can be negotiable or non-negotiable, so it should clearly mention on the top of the agreement.
  • Fulfil all the legal requirements for a promissory note to make it legally enforceable.
  • Define the amount of interest and installments including the interest.
  • You can define that the loan will be paid in a single instalment, including the borrowed amount plus interest.
  • You also can define an interest only instalment plan, in which the borrower will pay only the interest in instalments and will pay the principal amount in a single lump sum amount on the decided date.
  • Start your contract with a title and then mention the names of the lender and borrower with their complete addresses.
  • Add the negotiability of the contract.
  • Design a clause to deal with late payment of a loan or installment of the loan.
  • Mention the amount of loan that is provided to the borrower.
  • The contract must be signed by both the entities along with the date and two legal witnesses.
  • Each entity should have a copy of the agreement.

Create your own Personal Loan Contract by using the following template,

loan contract form

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